Topic: Is El Salvador in debt because of the bitcoin price drop? - page 4. (Read 747 times)
Afaik salvador already profited and used profits from their first buy, and probably the rest counting how markets been going.
I have previously thought about the question of how the sharp drop in the price of bitcoin will affect the economy of El Salvador. It is clear that this will not be better. Previously, the wealth of the state was measured by the level of gold and foreign exchange reserves, in this case, it is probably more appropriate to use the term capitalization of the economy. The capitalization of El Salvador has certainly fallen. But if they do not sell bitcoins during the period of its fall, then there will be no losses. Now El Salvador has no other way but to continue buying bitcoins during this period of decline.
Not a problem, two pics of laser eyes and any issue is solved.
How you set up a fund in $ to buy BTC and then from that fund you spend profits in $ from something that is losing value but without selling BTC is beyond me.
How you set up a fund in $ to buy BTC and then from that fund you spend profits in $ from something that is losing value but without selling BTC is beyond me.
Ah yeah, the state leadership proving once more that they have a deep inability and unwillingness to fix real economic and fiscal problems, but who can blame them when laser eyes is the easy fix that wins you Twitter followers and influencer approval, yeah?
I hate to say it but more and more we're going to see a lot of banking people who can't wait to use El Salvador as teachable moment fodder. Wonder if Bukele will soon be on the phone calling up them Miami conference friends and getting their voicemail. I suppose they could always NFT their Twitter profiles.
El Salvador deserves to do better economically. He's doing his best to build up the nationals wealth through literally the best performing asset in the last decade.
Right now its looking worst decision but Wait for bitcoin To bounce and everyone will be praising him
Right now its looking worst decision but Wait for bitcoin To bounce and everyone will be praising him
Bitcoin always trades in a certain range. It's mathematically improbable (if not impossible) for it to keep dropping month after month until $1000 or lower and that long term range is between the two last bull market tops, so 20-70k USD. Every analyst will tell you that this is where you can expect the price to be and it means that the lower you are able to buy in this range the less risky the investmnet becomes for you. Sooner or later the price will land in a different level of the same rande. Today it's at 34k and tomorrow it can be at 29, but in a month or 6 months it will eventually land somewhere else like 40 or 50k.
By selling you accept the current point of the range and exit. If Bukele ever decides to accept a level which means a loss for him, it's his choice, but he doesn't strike me as dumb.
By selling you accept the current point of the range and exit. If Bukele ever decides to accept a level which means a loss for him, it's his choice, but he doesn't strike me as dumb.
Yes, at this stage of market development it may seem to many that this is true and El Salvador really "unsuccessfully" invested his money, but this is not so. Firstly, this is a long-term investment and not a speculative one, so there is nothing to worry about, and secondly, we understand that this has already happened and more than once (especially those who have been here for a long time) understand that such recessions are only a correction and it is quite expected. There is no continuous growth anywhere, there is always a moment of change in rates, trends, and so on. Therefore, I think that El Salvador will still laugh at his critics when bitcoin takes another historical height.
They are not in debt because what they own is an asset, not a liability. They are temporarily at loss based on their average entry price but not in debt.
At a loss and in a debt is different and it is over-exaggeration to call them in debt because of Bitcoin falls. In long run, they will have a big fortune if they hodl their Bitcoin long enough.
At a loss and in a debt is different and it is over-exaggeration to call them in debt because of Bitcoin falls. In long run, they will have a big fortune if they hodl their Bitcoin long enough.
the media circulating, the impact of the decline in el salvador debt bonds swelled to become one of the worst performers, but strangely when crypto was destroyed, el salvador actually bought bitcoin, president tayib bukele dared to buy bitcoin, maybe tayib bukele believed that one day bitcoin would high again, and will make their economy better again.
Maybe if El Salvador have decided to sell, then we can say that the country have added more debt to it. Now they use the dip as an opportunity and adding more to the holding. Everyone were speculating the adoption by El Salvador, but very few have spoken about the negative part of the adoption. As El Salvador is a small country, even the fund spend on buying Bitcoin will constitute a big portion. So, the market crashes will also make some disturbance on the economic situation of the country. As the market will recover, El Salvador can use bitcoin as a tool to improve its economy in the long term.
It is not as if the end of btc has come, am sure the president of El-Salvador must have taken this into account while making the decision to make btc their legal tender, before such a big step is taken (something that has to do with the entire countries economy) a lot of consideration, thorough analysis are being made to ensure utmost outcome, i don't think this decision was made on a light note hence proper precaution in case of situations like this must have been put in place.
Because of the recent massive drop in bitcoin, I assumed that this bitcoin drop had put them in debt. If this dump continues for some more weeks, then it might be problematic for the El Salvador government. Because the opposition party has something to blame them for any kind of debt
Debt? I guess you mean loss. They are probably buying BTC as a long term investment and not for quick flip so no worries if you buy the dip while it keeps dipping. That's why dollar cost average (which I guess they are doing) is a pretty good investment technique.Lol, a good one.
@Imran232, El Salvador was in trouble 20 years ago when it gave up its own currency, they are in trouble today, and probably will be in 10 years from today. Looking so narrowly and in the short term at things in the context of "the country is better or worse because of Bitcoin" really doesn't make sense.
Bitcoin can only be part of the solution, in this case as a tool that was primarily intended to save on remittance fees for their emigrants, and everything else is more in the realm of gambling in the long run. Your and many people's problem is that you look at Bitcoin only from the perspective of monetary value, and you completely ignore why it even exists. Maybe it's time to read the white paper, if anyone is interested in that at all...
Bitcoin can only be part of the solution, in this case as a tool that was primarily intended to save on remittance fees for their emigrants, and everything else is more in the realm of gambling in the long run. Your and many people's problem is that you look at Bitcoin only from the perspective of monetary value, and you completely ignore why it even exists. Maybe it's time to read the white paper, if anyone is interested in that at all...
Unrealized loss isn't actual loss, so El Salvador doesn't in debt due to Bitcoin price fall. They wouldn't bought Bitcoin by loan or using emergency funds, so they wouldn't sell their coins of this dump.
Well, when a country already accept Bitcoin as legal tender... they should treat Bitcoin value is 1BTC = 1BTC no matter what, just like how fiat money always got inflated but all people still treat it $1=$1. If their citizens can't treat 1BTC = 1BTC, they're still not trusting Bitcoin as legal tender.
Well, when a country already accept Bitcoin as legal tender... they should treat Bitcoin value is 1BTC = 1BTC no matter what, just like how fiat money always got inflated but all people still treat it $1=$1. If their citizens can't treat 1BTC = 1BTC, they're still not trusting Bitcoin as legal tender.
The key words here are "LONG TERM" as per _act_'s post
There is constant obsession surrounding Bitcoin v FIAT, so many people think if the
market moves they are up or down while still holding the same amount of Bitcoin.
as per NeuroticFish's post the market doesnt automatically affect the
amount of Bitcoin held by anyone at any one time.
I would imagine the opposition party can and will use the current down turn to
attack Bukele's government, this is normal and would happen anywhere.
Bukele will be able to defend their position on Bitcoin, he understands how the
markets move.
There is constant obsession surrounding Bitcoin v FIAT, so many people think if the
market moves they are up or down while still holding the same amount of Bitcoin.
as per NeuroticFish's post the market doesnt automatically affect the
amount of Bitcoin held by anyone at any one time.
...If this dump continues for some more weeks, then it might be problematic for the El Salvador government. Because the opposition party has something to blame them for any kind of debt. And because of the economy, stocks and fiat investors also have something to say against Bitocin. If this happens, then other countries will be really confused about making bitcoin legal tender. To make it legal tender, they might study the case of El Salvador.
It's just my speculation. What do you think about my speculation? I really appreciate your opinion.
It's just my speculation. What do you think about my speculation? I really appreciate your opinion.
I would imagine the opposition party can and will use the current down turn to
attack Bukele's government, this is normal and would happen anywhere.
Bukele will be able to defend their position on Bitcoin, he understands how the
markets move.
The only person who can truly answer your question is Bukele himself and none else, because we cannot be sure if they sold any bitcoins and where exactly they bought bitcoins also as far as I know since they didn't sell any bitcoins, we cannot say if they didn't lose anything or they got profits out of it. On the other hand, we all know the price of bitcoin will increase in long term and even if El Salvador don't get anything and even lose in the short term they still can hold profits in the long term this will take some time but I'm sure holding 1801 bitcoins for El Salvador can help their economic situation.
Their economic condition with the decline in BTC prices will definitely have an impact. There is only one strategy that can be used to cover their losses which is to buy in large quantities at the price dip so as to drive positive vibes in the market with the source of power they use. Countries that legalize BTC must definitely experience this, it will never be possible, so this is a natural thing.
The decline is expected to happen but people don't anticipate it which is actually the reality. Though it looks bad seeing their situation, however, investing in crypto will give them an opportunity to pay those debts once the market turn to bullish again.
No
El Salvador Government Debt to GDP
https://tradingeconomics.com/el-salvador/government-debt-to-gdp
....................
El Salvador Government Debt to GDP
https://tradingeconomics.com/el-salvador/government-debt-to-gdp
....................
Thanks for your information, but fiat debt can't be news for poletics. Because they need news to blame the government. What they started from the beginning of bitcoin's legal tender. I hope you understand what I want to mean. And as I already mentioned, it's just a speculation, and if this happens, other countries might take it as a thread to make it legal. What is my concern?
<..........>
Thank you so much for your detailed and recent news regarding this topic. And I get what your opinion basically is.
El Salvador sure is a really small and not-so-rich country, but do you really think they'd put that much funds into something that could drop and put them into debt? I'm pretty sure Bukele and his finance people aren't THAT incompetent. If they were really bullish on bitcoin but at the same time can think realistically, I'm pretty sure they'll have money for dips and crashes.
He has a nice sense of humour too!
https://twitter.com/nayibbukele/status/1485031106982428677
He has a nice sense of humour too!
https://twitter.com/nayibbukele/status/1485031106982428677
The only person who can truly answer your question is Bukele himself and none else, because we cannot be sure if they sold any bitcoins and where exactly they bought bitcoins also as far as I know since they didn't sell any bitcoins, we cannot say if they didn't lose anything or they got profits out of it. On the other hand, we all know the price of bitcoin will increase in long term and even if El Salvador don't get anything and even lose in the short term they still can hold profits in the long term this will take some time but I'm sure holding 1801 bitcoins for El Salvador can help their economic situation.
Their economic condition with the decline in BTC prices will definitely have an impact. There is only one strategy that can be used to cover their losses which is to buy in large quantities at the price dip so as to drive positive vibes in the market with the source of power they use. Countries that legalize BTC must definitely experience this, it will never be possible, so this is a natural thing.
The only person who can truly answer your question is Bukele himself and none else, because we cannot be sure if they sold any bitcoins and where exactly they bought bitcoins also as far as I know since they didn't sell any bitcoins, we cannot say if they didn't lose anything or they got profits out of it. On the other hand, we all know the price of bitcoin will increase in long term and even if El Salvador don't get anything and even lose in the short term they still can hold profits in the long term this will take some time but I'm sure holding 1801 bitcoins for El Salvador can help their economic situation.
I assumed that this bitcoin drop had put them in debt.
Why?!
If looking from the fiat perspective, they would be in debt from the moment they've bought the BTC, since that's when they've paid the fiat.
If looking from Bitcoin perspective, nothing has change, since 1 BTC = 1 BTC.
What has actually change is that:
* the individuals holding Bitcoin are now at a potential loss (it will be real loss only if the spend)
* the prices seen in bitcoin will be bigger (since the calculation base is USD)
As said, it may look bad now as investment and it can be seen that they're at a potential loss. But it's not a real loss until the point the investment is liquidated. (1BTC = 1BTC, remember?)
But since the goal is using Bitcoin as a currency and the coins bought by the country are there for backing/helping the money flow, I see no loss there.
Jump to: